OmniVision CEO Discusses F2Q2011 Results - Earnings Call Transcript
OmniVision Technologies, Inc.
F2Q2011 Earnings Conference Call
November 30, 2010 5:00 pm ET
Executives
Brian Dunn – IR
Shaw Hong – President and CEO
Ray Cisneros – VP, Worldwide Sales
Anson Chan – VP, Finance and CFO
Analysts
Yair Reiner – Oppenheimer & Company
Paul Coster – JP Morgan
Harsh Kumar – Morgan Keegan
Raj Gill – Needham & Company
Presentation
Operator
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Ladies and gentlemen. Thank you for standing by and welcome to the OmniVision Technologies conference call for the second quarter of fiscal 2011. (Operator instructions) Later we will open the call for your questions. Instructions for queuing up will be provided at that time. As a reminder, this conference is being recorded for replay purposes. I will now like to hand the call over to your host for today, Mr. Brian Dunn. Please proceed.
Brian Dunn
Thank you very much. Good afternoon, everyone, and welcome to our fiscal 2011 second quarter earnings conference call. On today’s call will be Shaw Hong, President and CEO,
Ray Cisneros, Vice President of Sales and Anson Chan, Chief Financial Officer.
During this conference call, we may make forward-looking regarding our business including statements relating to revenues, earnings targets and our product plans. This is based on information as of today, November 30, 2010 and actual results may differ materially from those set forth in such statements. These and other forward-looking statements involve assumptions, risks and uncertainties that could cause actual results to differ materially from these statements. For a discussion of these risk factors, you should review the forward-looking disclosures in the earnings release we issued today as well as OmniVision’s SEC filings.
During today’s call, we will also discuss certain GAAP and non-GAAP financial measures, the latter of which excludes stock-based compensation expenses and related tax effects. A reconciliation between the two is available in our earnings release posted on our website.
With that, I will now turn the call over to Mr. Shaw Hong. Shaw?
Shaw Hong
Thank you Brian and welcome to all of you joining us on the call and webcast. Earlier this afternoon we issued a press release describing our resource for the second fiscal quarter of 2011. For those who have not yet had a chance to read the release let me provide you with a recap of our financial results.
In Q2, we achieved a record revenues of $240 million, a tangible percent and ratio increase in sales. On a non-GAAP basis, gross margin was 28% the second consecutive quarter of sequential improvement in gross margin. Net income was $34 million or $0.58 per diluted share. This is another record for OmniVision.
We maintained our strong balance sheet with a cash position of $397 million and we shipped record volumes of image sensors exceeding 180 million units. This is the highest level of units ever shipped by OmniVision in the first quarter. We are extremely pleased with our record resource for both revenue and earnings.
In my formal comments today I would like to talk about the following areas. First, our focus on investing, maintaining and executing on our leadership in image sensor technologies and solutions. Second, our development of imaging solutions that provide our customers with technologies for the next generation products. Third, discuss some rapid growth trends in the market we serve and out interest to serve them. Fourth, brief overview of our global operations and recent activities.
First, I'd like to speak about OmniVision's leadership role in digital imaging technologies. In particular, our OmniBSI and CameraCube technologies. OmniVision’s OmniBSI, our first generation backside illumination technology is testimony to our technology leadership. As I mentioned before, not only we are the first to commercialize this technology, our volume shipment in OmniBSI based product is a testament to our success in this technology.
Our BSI architecture enabled the most direct path or light to the sensor. This resulted in shorter length and height, thinner camera modules and increased (inaudible). All this while delivering excellent imaging performance. OmniVision is hard at work developing the next generation of BSI. Our OmniBSI-2 technology based on 300-millimeter semi conductor wafer processors. The second-generation BSI architecture is capable of delivering the smallest and highest performance pixel technology in the market. Now pursuing design wins for BSI-2 and we believe we are more than a generation ahead of most competitors. We anticipate shipping BSI-2 based products in the next calendar year.
Next, our CameraCube products are gaining traction and we are shipping those products in steady volumes. Most OmniVision and our customers have learned a great deal about wafer level cameras and we will continue to push the envelope on Omni's product technology. Our plans are to move closely, align our sensor optics and packaging know how into one vertical, integrated and maintain and generate more competitive solutions. As we have had said many times, our strategic direction is based on the principle of disciplined investment in emerging technologies.
We invest in the needs of promising new markets and the increasing satisfaction of the consumer. The common thread in our product or map is to use our market leading imaging technology. So it is appropriate that we talk next of how OmniVision imaging solutions based on our advanced technologies release (inaudible) for our customers next generation solutions.
Going first to our OmniBSI backside illumination technology. We are very pleased that OmniBSI is being adopted abroad and record scale worldwide for a wealth of and consumer products and Tier 1 OEM brand names, including OEMs for high end smartphones, notebooks, portable multimedia devices and even commercial enterprise applications. In the past several months, we released new sensors to now extend our OmniBSI solution from VGA up to 14-megapixel. To highlight a few, our new VGA will enable integration of camera modules into extreme (inaudible)the LCD display panel of 2 millimeter or less.
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